Speaker numbers apply only to this recording.
The Chattanooga City Council’s Economic Development Committee convened at approximately 1:21 PM ET on October 27, 2026, to discuss significant reforms to the city’s Tax Increment Financing (TIF) policies and debate a proposed clawback settlement with Nippon Paint. Administration staff presented a detailed review of the current TIF application process, policy recommendations from external audits, and a new software platform for managing incentives. The committee expressed strong opposition to the proposed Nippon Paint settlement, directing staff to renegotiate a more aggressive deal before a full council vote.
Administration staff (Sharita) provided a comprehensive overview of current TIF policies, detailing the standard 12-step, 6-to-12-month approval process involving the Industrial Development Board (IDB), City Council, and County Commission. A key proposal was the elimination of the Application Review Committee (Step 6), which staff stated adds roughly five weeks to the timeline and duplicates review work now managed by a new $44,000 Civic Service software platform funded by the IDB. Additional recommendations from a county auditor audit and a site selector analysis (comparing Chattanooga to Knoxville, Greenville, Louisville, and Tulsa) were reviewed, including potential changes to the $8,000 application fee and the 15% cap on infrastructure reimbursement for projects.
Staff reviewed the Nippon Paint land donation deal from 2018, where the city donated 29 acres of land (valued at $1.157 million) in exchange for a commitment to create 150 jobs with an average salary of $47,070 and $60 million in capital investment by 2027. The city fulfilled its obligations, including the land donation, a $900,000 road extension, and sewer relocation, totaling approximately $4 million in investment. Nippon Paint built one 270,000-square-foot facility, invested $52 million, and employed 30–35 people in testing and chemistry roles, but failed to construct two additional buildings or create the promised jobs, citing the downturn in the electric vehicle market. The proposed clawback settlement requires Nippon to repay the $1.157 million land value and return 10 acres of the donated land.
Okay. I'm going to call to order the economic development committee for the Chattanooga City Council. Today is October 27, 2026. Can I get a motion on the minutes from our last economic development meeting, please? I can give you a motion, but if we don't have a quorum, can we have a quorum? There's five of us on the committee, and there's three of us here. Which makes a quorum of our committee. That's right. Never mind. We do not actually have a quorum, so we won't vote on the minutes. Councilman Harvey, Councilman Burrs, and Councilman Elliott. Okay, so Sharina has put together a presentation for us about the current status of our TIFF policies and some recommendations about changes that we would she would like for us to consider and the administration would like us to consider. So we'll turn the floor over to her. I provided at our previous meeting an overview of the status of those TIFS. Those TIFFs were approved under two different versions of TIFP policies, so slight modifications, and we're actually looking to make some recommendations this fall to modify our existing policies as well. And so I'll do a quick overview. And so table of contents. I'm going to start first high-level overview of the policy provision that allows us to make changes to TIP policies at any time. I then want to walk through our existing policies, the different sections of them. I will go over an overview, a flow chart of the process by which TIFFs get approved, and then a quick highlight of new software that our economic development department has implemented to help with monitoring TIFS and pilots, and then look at some of the sample recommendations that are currently under view by county auditor. We have two consulting teams and then city council. I've had some recommendations from actually members that would like to see some changes to some of the policies. So quickly, if when we get to section four, I will cover some of the procedural items, but basically from time to time and without notice, these policies may be amended away in whole or part by the board and city, and new policies may also be adopted by the board and the city. So under this provision, we're able to bring forward as often as we need it, recommended recommendations and changes to the policies. Overview of the most recent TIP policies. Thank you. Appreciate it. And so basically, if we're to walk through these, it'll give you an overview of the various sections of the policy so that when we get to the flow chart, you'll see where those happen. And then as we look to modify existing policies, I will refer to the exactual sections in which those policies fall. So basically, the very highlight, the very first one is the introduction, the overview. It's the purpose of the TIFFs, why we do the TIFFs. It's mainly for public infrastructure, is how we use it. There are other municipalities around the state that have TIFF policies that are used in other ways, but we use ours mainly for infrastructure that's for public benefit. Next is the general policy section. That will give you an overview along with sort of how we use it, why we use it, and our restrictions within it. There you go. If you want to flip through your hard copy while I'm going through that. Section two is going to be your statutory background. That's the Tennessee state statutes that provide the provisions under which the TIFFs are operated under the Industrial Development Board. And so what we will see is with our policies, our policies involve the Industrial Development Board because they have to be involved by state statute. I got one. Thank you. The Industrial Development Board, and then the City Council and then the county commission should the county decide to participate. So all of that will fall under your statutory background. It also outlines what is actually required in a TIFF. And so again, it's there's a preparation submission of an economic impact plan that has that's required by state statute.